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A sustainable approach to contingent labor 

3 min read

Organizations are recognizing the importance of treating all segments of their workforce with equal importance, especially gig and contingent workers.

The pandemic, and subsequent “great resignation” have revolutionized how we manage our workforce, underscoring the crucial role of contingent labor in keeping businesses afloat. Over the past few years, the need for flexibility, resilience and adaptability has become more apparent than ever, making freelancers, contractors, and other non-traditional workers indispensable to any robust workforce strategy. These workers help businesses stay agile, respond quickly to market changes, and attract top talent, all of which are key to long-term growth and competitiveness.

Historically, many companies have underestimated the importance of their employer brand among contingent workers. However, the recent shift in workforce dynamics has highlighted that how you treat your contractors is just as important as how you treat your full-time employees. Contractors, who often make up around 30% of the workforce, need to feel valued and included to ensure a cohesive and sustainable workforce environment.

The importance of a blended workforce

The pandemic revealed the limitations of relying solely on permanent staff, prompting organizations to adopt broader strategies that increasingly depend on non-traditional workers.

In a recent Harvard Business Review article, Lynda Gratton and Diane Gherson predict that managing a blended workforce will be a major managerial challenge in the coming years. They anticipate a move away from rigid, industrial-era policies towards greater flexibility and enhanced employee benefits. This shift aims to promote workforce sustainability by prioritizing and improving employee wellbeing and retention.

This prioritization of sustainable workforce management has become especially relevant in recent months, particularly when it comes to contingent labor. The pandemic revealed the limitations of relying solely on permanent staff, prompting organizations to adopt broader strategies that increasingly depend on non-traditional workers. As Gratton and Gherson suggest, the future will require a more flexible approach to workforce management, one that values and integrates contingent workers effectively.

High competition for contingent talent

Even though the labor market is not as heated as in recent years, finding and keeping contingent talent is still tough in many sectors. Take the IT industry, for example. It’s still experiencing tight labor conditions, with government agencies and startups scouting talent that used to go to major tech firms. The retail sector isn't any easier, as this industry is also facing stiff competition for these workers. This highlights just how crucial it is to create an engaging and supportive environment for contingent labor. Making sure these workers feel valued and included to retain their skills for critical projects is key to building a more sustainable and adaptable workforce.

Some organizations are offering incentives like signing bonuses in specific locations to attract the right talent. It's clear that even with a thriving gig economy, employers still need to actively engage and attract contingent talent. Identifying talent with the right skill sets and focusing on their skills development continue to be significant challenges.

Embracing skills-based hiring for contingent workers

The concept of skills-based hiring is gaining momentum as companies prioritize specific skills over traditional credentials like college degrees. This approach is especially relevant for contingent labor, where certifications and on-the-job experience often outweigh formal education.

Skills-based hiring also acknowledges that valuable skills can come from various employment arrangements, not just traditional job titles. You can look to external employees on a short-term basis to “buy” skills in and plug current gaps, such as experienced hires (the “buy” part of the buy-build-borrow model), flexible workers, contractors, and early careers workers. It also gives you a clear indicator to plan future hiring efforts if budgets currently can’t sustain a larger, full-time workforce. Additionally, organizations are also recognizing the importance of continuous learning and development to keep their contingent workforce adaptable and skilled, and investing in programs to support ongoing learning, traditionally the domain of permanent employees.

Tips for long-term engagement with contingent talent

To build and nurture your non-full-time workers, you need a strategic approach that continuously re-engages these individuals over time. Consider the following:

#1: Track skills and experiences

Develop a system that tracks the skills and experiences of your contingent workers. This will allow you to match them with a variety of assignments that align with their expertise and interests.

#2: Offer diverse assignments

Instead of assigning the same tasks repeatedly, provide opportunities for these workers to engage in different projects across the business. This keeps their work exciting and helps them grow their skill set.

#3: Foster a sense of belonging

Cultivate a strong organizational culture that makes contingent workers feel valued and connected to your company. Regular communication, inclusion in team activities, and recognition of their contributions strengthens their loyalty.

#4: Encourage continuous learning

Invest in the professional development of your non-full-time employees. Provide access to training programs, workshops, and other learning resources to help them stay updated with industry trends and improve their skills.

#5: Build long-term relationships

Aim to maintain long-term relationships with your contingent workers. Engage them in ongoing projects and keep them informed about future opportunities. This helps in building a reliable talent pool that you can tap into as needed.

By integrating contingent workers more effectively into your workforce strategy, organizations can improve agility, access to talent, and overall business performance. This approach not only meets immediate business needs but also supports long-term sustainability and growth in a post-pandemic world. 

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